Softening CV RVs making rental more attractive

                                   
Softening van residual values seen in the first part of this year are making commercial vehicle rental a more attractive option, says TLS Vehicle Rental.
A fall in demand in the used market, especially for larger vans and vehicles in poor condition, means that many fleets are failing to achieve the residual values they estimated.

Sean Welham, marketing director at TLS, explained: "The used CV market has been buoyant for a number of years and this has helped to persuade a number of fleets that outright purchase is a viable option for them.

"However, over the last few months, residual values have certainly started softening, and many fleets are getting their fingers burned. Only the best vehicles are achieving book price, and buyers can afford to look around and take their pick.

"Losing out at disposal time in this way can be especially traumatic in business terms for smaller fleets and one man operations. They were expecting a lump sum, probably to put towards a new vehicle, and it is suddenly much lower than they were hoping for."

Welham said that the company was, as a result, making some headway in convincing commercial vehicle operators to look at long-term rental as an option.

He explained: "We have started coming across instances in the last few months of small to medium businesses that have suffered with van disposal and are subsequently open to the idea of acquiring a vehicle in a different way.

"In these cases, we believe that rental is a viable option and, while it is quite a mental shift for these businesses to make, we are achieving some successes.

"What rental provides is simple - a fixed cost van for your business where you only get charged for the time that you need it with no unexpected costs. When we explain it in these terms, many potential customers are convinced."

Welham added that TLS has largely been insulated from the effects of softening RVs by its sophisticated disposal strategy.

He said: "We dispose of between 8,000 and 9,000 vehicles every year and we use a wide number of methods and channels. While it would be wrong to say that we have not had to work a little harder to achieve good prices, we are very much holding our own."